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The meat company had forewarned the result during roadshow meetings with shareholders last month, in which it said it was facing its worst financial result since 2012, when it posted its first operating loss in 20 years.
Turnover was $2billion, down from $2.2b the previous year.
In a statement, chairman Murray Taggart said the past 12 months had been ‘‘extremely difficult’’ for the company and farmers and, while 2023 was the 75th anniversary of the formation of Alliance, it had not been a year to celebrate.
‘‘The board and management have undertaken a comprehensive review of the business and we are taking steps to get the co-operative back on track to profitability.
‘‘While it is early days, initial trading this financial year is tracking to expectations,’’ Mr Taggart said.
Like other red meat processors, Alliance faced significant volatility due to geo-political tensions, labour constraints, inflationary pressures and weakening global markets, he said.
Prices in key global markets began falling steeply through the October-December 2022 period and remained weaker for the remainder of the financial year, compressing margins.
The global market price for lamb fell almost 25% in just two weeks in October.
As a result, the co-operative recorded a significant decline in inventory value between October and December, driven by the challenging global markets.
China, Alliance’s largest export market by value and volume, had yet to bounce back after the Covid-19 pandemic.
Globally, high interest rates and inflation eroded consumers’ discretionary spending.
Fewer people dined in restaurants and more people swapped higher-priced red meat proteins for less expensive white meats.
There were also high levels of inventory across all proteins in various markets, particularly lower-cost Australian sheep meat, which drove pricing down, he said.
In their chairman and chief executive review, Mr Taggart and chief executive Willie Wiese said the worrying conversion of productive sheep and beef land into carbon farms was continuing apace.
New Zealand stood alone globally in not imposing limits on fossil fuel emitters planting trees to offset their emissions.
It was imperative that was urgently addressed and the issues rectified within the Emissions Trading Scheme.
‘‘Without substantial changes, New Zealand’s productive sheep and beef farmland will be permanently lost, and rural communities will suffer,’’ they said.
The uncertainty around emissions pricing remained a concern. New Zealand farmers were willing to play their part in addressing climate change and the sector had made considerable progress over the past 30 years, including reducing absolute emissions by 30%, the review said.
However, it argued the focus should be on setting up a practical and cost-effective emissions measurement and reporting framework, and ensuring genuine sequestration was recognised and there were viable mitigation tools available before pricing was considered.
The pair acknowledged the retirement of director Dawn Sangster, of Ranfurly, after a 12-year tenure, saying she would leave a legacy of improved communications with shareholder farmers and more involvement from women in governance and leadership roles.
The company’s annual meeting will be held in Alexandra on December 15.